She asks: If you had all the money in the world, what would you change about your life to make you happier. For most of us, it’s not a $2 million yacht. What we’d likely buy is a carefree life and financial security. The Fiscal Times talked with Vanderkam, the author of two previous books about Americans’ complex feelings about money.

The Fiscal Times (TFT): How connected are money and happiness?Laura Vanderkam (LV): There’s a couple of ways to measure happiness. One of them is to ask, How do you think your life overall is going? A positive outlook keeps rising with income as far up as people have checked, well up to $160,000 a year. The ‘how happy are you right now’ question, and what your current mood is – that seems to max out at about $75,000 a year, which is probably the point where people have solved most of their day-to-day worries of a car breaking down, or an unexpected bill, or paying a mortgage. But past that, people’s day-to-day happiness does not go higher.

TFT: So why are some of the wealthiest people the most miserable?LV: Some are, but some wealthy people are also very happy. There’s no data I know of on what percentage of wealthy people are miserable and what percentage are happy, so we tend to remember stories of the Scrooge type because we find those the most interesting. Overall, people’s satisfaction of their lives rises with their income.

TFT: A lot of millionaires say that they feel don’t have enough money. Why?LV: Any person can feel that way; one problem especially in the United States is that we tend to compare ourselves to the small group of people who have more, as opposed to the billions of people on this planet who have less. If you’re trying to keep up with the Kardashians, then yes, you are going to feel poor even if you are very well off. But if you look at people living in the slums of India, say, you’re going to feel like you’re incredibly rich.

TFT: At some point, even the most modest families who have good money values can hit hard times, though, so how can we find the balance between protecting ourselves without obsessing over finances?LV: People should save far more money than they do. Instead of saving for retirement, save for now. If money doesn’t buy you love, what it does buy is freedom. More assets give you more options in life. You have the ability to walk away from a job that’s not making you happy, and if you do like your job, if you have assets in the bank, you can push back. You can say, ‘I don’t want to do this,’ or ‘I’d like to do something else.’ What’s the worst they can do? Fire you? You don’t care.

TFT: In the years leading up to the financial crisis, many Americans lived far beyond their means. How did so many get so lost?LV: Part of it is again comparing ourselves with the wrong reference group. But there’s also been the idea that housing is always good to own and to spend more on. Many budget advisers say you can spend one third of your income on housing and people don’t stop and think that this doesn’t have to be the same percentage, whatever your income may be. So even people who are doing very well find it normal to take on a lot of debt to buy a house.

TFT: Will we get back to that level of spending before the financial crisis?LV: It’s funny: If you read old magazines, people always misjudge human nature. They tend to think that things will be very different in the future and that’s just not true. After the 1987 stock market crash, people said that no one’s ever going to speculate on stocks again. Well, that lasted 10 years until the internet bubble and after that popped; we just started bidding up housing prices. I would guess that 10 years from now, there’s going to be a bubble in something else. That’s just human nature. We like to think we can get rich quick.

But I do hope there is at least more consideration of what we’re doing with our money. We live in a rich country and there’s a lot of worry about inequality now, but many people have quite a bit more than two generations ago. So the question is how do we use those blessings to make a good life for ourselves and those we care about? I’m hoping that we’ll retain some of that mindfulness about money. As we’re doing this, it’d be great if the government could be more mindful with their money and ask what we’re getting for all the expenditures we have as a country.

TFT: One interesting point you make is that a lot of little purchases can make you happier than a few big purchases. But doesn’t buying that Frappuccino every day at Starbucks add up?LV: They can add up without realizing it, but if you actually let yourself enjoy them and remind yourself that they are little pleasures, then you can continue to get joy out of them every time. Because happiness is more a function of frequency than intensity – and it’s not that there’s anything wrong with intense experiences, but you can’t have them very often. If you have $5,000 to spend, you can spend it on one really nice table, and that’s it. Whereas if you took that same $5,000 and said, ‘Every week I’m going to go out to dinner with friends,’ every time it would be different, and you could do it hundreds of times and get hundreds of happiness boosts instead of just one.

TFT: It seems like after buying a new purse, we realize it didn’t give us that much satisfaction – but then we do it again.LV: Some purchases can make you very happy, but there’s no point spending mindlessly on things that don’t. Know yourself and figure out what sort of activities give you a lot of happiness, and many of these things don’t have to cost anything at all – a picnic in the park with friends, a free concert, or museums with discounted days. These are great options instead of purchasing another thing. Experiences have a triple happiness whammy – you anticipate the experience beforehand, which is almost as pleasurable as the thing itself (we look forward to Christmas almost as much as Christmas morning), you enjoy having the experience and you savor the memory afterwards. Every time you think of the experience you get a little happiness boost. It’s really three in one.

TFT: Have you made any purchases you regret?LV: I have a lot of clothes in my closet I haven’t really worn – I thought I was getting a bargain, but if you don’t wear something, it’s not a bargain.